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Vista Pharmaceuticals Ltd Management Discussions.

GLOBAL PHARMACEUTICAL MARKET:

India is the largest provider of generic drugs globally. Indian pharmaceutical sector
industry supplies over 50 percent of global demand, 40 percent of generic demand in the US
and 25 percent of all medicine in UK.

With 71 percent market share, generic drugs form the largest segment of the Indian
pharmaceutical sector. Based on moving annual turnover, Anti-Infectives (13.6%), Cardiac
(12.4%), Gastro Intestinal drugs (11.5%) had the biggest market share in the Indian pharma
market in 2018.

Indian drugs are exported to more than 200 countries in the world, with the US as the
key market. Generic drugs account for 20 percent of global exports in terms of volume,
making the country the largest provider of generic medicines globally and expected to
expand even further in coming years. Indias pharmaceutical exports stood at US$ 19.14
billion in FY19 and US$ 3.1 billion in FY20 (up to June 2019). In FY18, 31 percent of
these exports from India went to the US.

The Pharma Vision 2020 by the governments Department of Pharmaceuticals aims to make
India a major hub for end-to-end drug discovery. The sector has received cumulative FDI
worth US$ 15.98 billion between April 2000 and March 2019. Under Budget 2019-20,
allocation to the Ministry of Health and Family Welfare increased by 3.1 percent to Rs
63,298 crore (US$ 9.06 billion). Indian pharmaceutical sector is expected to grow at a
CAGR of 15 percent in the near future and medical device market expected to grow $50
billion by 2025.

India enjoys an important position in the global pharmaceuticals sector. The country
also has a large pool of scientists and engineers who have the potential to steer the
industry ahead to an even higher level. Presently over 80 percent of the antiretroviral
drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are supplied by
Indian pharmaceutical firms.

Indian companies received 304 Abbreviated New Drug Application (ANDA) approvals from
the US Food and Drug Administration (USFDA) in 2017. The country accounts for around 30
percent (by volume) and about 10 percent (value) in the US$ 70-80 billion US generics
market.

Indias biotechnology industry comprising bio-pharmaceuticals, bio-services,
bioagriculture, bio-industry and bioinformatics is expected grow at an average growth rate
of around 30 percent a year and reach US$ 100 billion by 2025.

INVESTMENTS AND RECENT DEVELOPMENTS

The Union Cabinet has given its nod for the amendment of the existing Foreign Direct
Investment (FDI) policy in the pharmaceutical sector in order to allow FDI up to 100
percent under the automatic route for manufacturing of medical devices subject to certain
conditions.

The drugs and pharmaceuticals sector attracted cumulative FDI inflows worth US$ 15.98
billion between April 2000 and March 2019, according to data released by the Department of
Industrial Policy and Promotion (DIPP).

Some of the recent developments/investments in the Indian pharmaceutical sector are as
follows:

 The exports of Indian pharmaceutical industry to the US will get a boost, as
branded drugs worth US$ 55 billion will become off-patent during 20172019.

GOVERNMENT INITIATIVES

Some of the initiatives taken by the government to promote the pharmaceutical sector in
India are as follows:

 In October 2018, the Uttar Pradesh Government announced that it will set up six
pharma parks in the state and has received investment commitments of more than Rs
5,000-6,000 crore (US$ 712-855 million) for the same.

 The National Health Protection Scheme is largest government funded healthcare
programme in the world, which is expected to benefit 100 million poor families in the
country by providing a cover of up to Rs 5 lakh (US$ 7,723.2) per family per year for
secondary and tertiary care hospitalisation. The programme was announced in Union Budget
2018-19.

 In March 2018, the Drug Controller General of India (DCGI) announced its plans
to start a single-window facility to provide consents, approvals and other information.
The move is aimed at giving a push to the Make in India initiative.

 The Government of India is planning to set up an electronic platform to regulate
online pharmacies under a new policy, in order to stop any misuse due to easy
availability.

 The Government of India unveiled Pharma Vision 2020 aimed at making India a
global leader in end-to-end drug manufacture. Approval time for new facilities has been
reduced to boost investments.

 The government introduced mechanisms such as the Drug Price Control Order and
the National Pharmaceutical Pricing Authority to deal with the issue of affordability and
availability of medicines.

ROAD AHEAD

Medicine spending in India is projected to grow 9-12 percent over the next five years,
leading India to become one of the top 10 countries in terms of medicine spending.

Going forward, better growth in domestic sales would also depend on the ability of
companies to align their product portfolio towards chronic therapies for diseases such as
such as cardiovascular, anti-diabetes, anti-depressants and anti-cancers that are on the
rise.

The Indian government has taken many steps to reduce costs and bring down healthcare
expenses. Speedy introduction of generic drugs into the market has remained in focus and
is expected to benefit the Indian pharmaceutical companies. In addition, the thrust on
rural health programs, lifesaving drugs and preventive vaccines also augurs well for the
pharmaceutical companies.

ADVANTAGE INDIA

COST EFFICIENCY

 Low cost of production and R&D boosts efficiency of Indian pharma companies,
leading to competitive exports. Indian pharma exports reached US$ 3.1 billion in FY20 (up
to June 2019).

 Indias cost of production is approximately 33 percent lower than that of the
US.

 Indias ability to manufacture high quality, low priced medicines, presents a
huge business opportunity for the domestic industry.

 Under Budget 2019-20, allocation to the Ministry of Health and Family Welfare
increased by 3.1 percent to Rs 63,298 crore (US$ 9.06 billion).

 In this sector, 100 percent FDI is allowed under automatic route.

US GENERIC PHARMACEUTICAL MARKET:

India accounts for around 30 percent (by volume) and about 10 percent (value) in the
US$ 70-80 billion US generics market.

INDIAN GENERIC PLAYERS IN GLOBAL MARKETS:

All the Multi-National Companies (MNCs) from India like, Aurobindo, Cipla, Dr, Reddys,
Glenmark, Strides, Sun Pharma, Unichem, and Wockhardt are the players in US Generic
market,

US GENERIC DRUG PRICE COMPETITION:

The Generic Price Competition is very Piers, The reason being, there will be at least 4
to 5 competitors and even up to 10, if the off-patented drug has sales are in Billions (US
Dollars),

VISTA PHARMACEUTICALS, INIDA (VISTA INDIA) FOCUS IS:

US Generic Market is our focus, Since the margins are better compared other country
markets and the volumes are also huge, More than 50% (Value) of the prescription drug
market is of Generic Drugs in US,

PRODUCTS TO BE INTRODUCED TO US MARKET IN 2018/2019:

CARDIAC DRUG:

Opportunities and Threats

The key challenges for the Indian pharmaceutical industry include the following:

 Ensuring 24x7 compliance with global cGMP standards; this will involve
continuous improvement in systems and processes as well as training of the workforce

 Increasing competition from smaller new entrants,

Risks and concerns

Vista Pharmaceuticals Limited has established a strong risk mitigation process which
entails regular and stringent monitoring of its business activities to identify, evaluate
and resolve risks, The top management of the Company and the Board are involved in
monitoring of risk assessment and mitigation, thus ensuring a quick resolution mechanism,
The Company has a work philosophy of doing business with high ethical standards and
topmost integrity, This principle has helped it to pre-empt and ease considerably the
risks that came across its way,

Internal control systems and their adequacy

 The Company has a well-established internal control framework, which is designed
to safeguard its assets against loss from unauthorized use and ensure reliability of
financial reporting. It maintains a system of internal controls designed for effectiveness
and efficiency of operations, compliance and regulations, continuously assess the
adequacy, effectiveness and efficiency of financial and operational controls. The
management is committed to ensure an effective internal control environment, commensurate
with the size and complexity of the business, which provides an assurance on compliance
with internal policies, applicable laws, regulations and protection of resources and
assets.

 The Company has in place adequate internal financial controls with reference to
financial statements. It has adopted necessary policies and procedures for ensuring the
orderly and efficient conduct of its business, including adherence to companys policies,
the safeguarding of its assets, the prevention and detection of frauds and errors, the
accuracy and completeness of the accounting records, and the timely preparation of
reliable financial information. During the year, such controls were tested and no
reportable material weakness in the design or operation was observed.

DISCUSSION ON FINANCIAL PERFORMANCE

Revenues

Vista Pharma recorded the revenue of Rs. 31.07 Crores during the year, registering a
growth of 7.45% as compared to last year revenue of Rs. 28.92 Crores.

Other Incomes

The Other income for 2018-19 was Rs. 2.95 Crores as compared to Rs. 0.40 Crores in
2017-18.

Expenditure

The expenses for 2018-19 were Rs.32.87 Crores as compared to Rs. 26.49 Crores in
2017-18.

Finance Costs

The finance costs for 2018-19 were Rs.1.67 Crores as compared to Rs. 1.57 Crores in
2017-18.

Profit Before Tax

There is Profit Before Tax for 2018-19 is Rs.1.15 Crores as compared to Profit Before
Tax of Rs. 2.83 Crores in 2017-18

Profits after Tax

The Profit After Tax for 2018-19 is Rs.0.94 Crores as against Profit After Tax of Rs.
2.19 Crores in the previous year 2017-18.

Earnings Per Share

The EPS for 2018-19 decreased to Rs.0.31 from Rs.0.76 in Previous Year.

Outlook

Demographic trends will be a significant driver of global demand for pharmaceuticals in
the next five years. Increase in diagnosis and treatment of chronic conditions and an
aging population will drive pharmaceutical demand in developed markets. In emerging
markets, population growth, coupled with improved access to healthcare and rising per
capita income will drive demand.

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